Category: warranties

‘Given the frequency with which sophisticated fraudsters arrange for the sale of properties which they do not own, it is perhaps surprising that the question of who, amongst the professionals involved, bears the risk when it happens has not been considered sooner and more definitively. In 2010 the question came before the Court in Excel Securities PLC v Masood [2010] Lloyds Rep PN 165, but only on a summary judgment application. HHJ Hegarty QC (sitting as a High Court Judge) held that the question of whether a solicitor purporting to act for the owner of a property warranted the identity of his client could not be answered in the abstract, and was not a suitable matter for summary judgment. A warranty of authority is an implied obligation arising as a matter of contract in particular circumstances, so it is not possible to determine the scope of any such warranty without a detailed consideration of the facts. Generally, however, a solicitor’s warranty extends to the fact that he has the authority of the person who has instructed him, but not as to the identity of that person.’

‘The changes of last August and the impending Enterprise Act 2016 changes for May of next year will transform the way we have to look at insurance contracts generally and, if our insurer clients’ underwriting departments have not substantially rewritten their proposal forms and policy documents, we can anticipate a few years of ongoing law making.’

‘If a solicitor executes a contract to sell “1 The Mall” that identifies the seller as “Mr Bloggs of 1 The Mall” (Mr Bloggs being the registered proprietor of that property), does the solicitor thereby promise to the buyer:

1. that she has authority to sell the property from the actual Mr Bloggs, the true owner of 1 The Mall? Or
2. that her client was someone who told her he was Mr Bloggs and that he owned 1 The Mall?’

‘A 20-day time limit within which claims for breaches of warranty as part of a share purchase agreement (SPA) had to be raised only began running once the buyer was aware of the “proper basis for a claim”, the Court of Appeal has ruled.’

‘It is was permissible to depart from the prima facie rule that damages following a breach of warranty in a share sale agreement were to be assessed at the date of breach and so to take into account events which had occurred after that date, where such departure was necessary to give effect to the overriding compensatory principle of assessment of damages.’

‘A reinsurance contract containing an express warranty clause, which provided that the carrying vessel should not sail out of port when there was a typhoon warning at that port or where the vessel’s destination or intended route might be within the possible path of the typhoon, was breached when a vessel did sail into a typhoon and the cargo was lost, and the reinsurers were not liable for the loss of cargo claimed under the contract.’

“The inadvertent naming of the wrong builder in a proposal form for insurance against latent defects including cover for the insolvency of the builder during the construction of social housing units, constituted a breach of warranty entitling the insurers to avoid the policy.”

“The Financial Services Authority (FSA) was within it rights to close down two unauthorised extended warranty schemes, regardless of whether the cover involved the payment of money to customers, the Supreme Court has confirmed.”

“A contract for repair or replacement only in the event of breakdown or malfunction which did not oblige the insurer to indemnify the insured for costs which the insured himself incurred fell within paragraph (b) of class 16 Schedule I to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.”

“Guarantees and warranties given by the directors of a company did not take effect despite the signing, witnessing and handing over of documents, the High Court has ruled. The documents in question were deeds and the Court said that they had not been ‘delivered.’ ”

“A contract for repair or replacement only in the event of breakdown or malfunction which did not oblige the insurer to indemnify the insured for costs which the insured himself incurred fell within para (b) of class 16 Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.”

“On 17 July 2007 the Law Commission published jointly with the Scottish Law Commission a consultation paper on insurance contract law. We invite comments on provisional proposals to modernise the law relating to misrepresentation, non-disclosure and breach of warranty by the insured.”